tv Closing Bell With Maria Bartiromo CNBC January 23, 2013 4:00pm-5:00pm EST
been on our panels up there are starting to throw in the towel. are you there yet? >> absolutely not. like to hear that. i think that's going to reinforce what i believe going forward here. you know, i think the market today is clearly bearish. i think -- >> you think this is bearish? >> with the exception of a few stocks, we're probably unchanged. >> so the averages you feel are masking a weaker market. >> a few stocks, apple, google, ibm. >> boeing account for a good portion of the dow gains today. >> boeing does. >> and ibm. >> very few stocks that are doing it right now, and i think we've found a new leadership group that's taken us higher so that's the tech sector. >> you're hanging in there. apple, would you buy it here? >> i won't comment on the individual stock. >> but you like technology? >> do i like technology. there's -- i do expect the pullback in the short term. investors have been paying for the improvement in the news. at some point they are going to want to see positive news, and i'm not sure it's coming just yet. >> okay. very good.
good to see you both. see you later. 15 seconds left heading towards the close, off the highs of the day but a new five-year high for the dow and we wait for apple an netflix numbers. we get those numbers right here on the second hour of the "closing bell." >> welcome to the "closing bell." i'm michelle caruso-cabrera in for maria bartiromo who is on assignment from davos, switzerland. bill griffith will rejoin me in just a moment. the dow closing at another five-year high. another within 400 points of an all-time high. here's how we're finishing the day on the street. the dow jones industrial average is higher by 66 points, 13,778. the nasdaq higher by 10.5. 3153. s&p higher by two. look at that. getting close to 1500 at 1494. don't forget, we are moments away from both netflix and apple earnings. first though let's get the latest on today's market movers. >> yeah. we got back with us again
michael pento of pento portfolio strategies. also with us right now is kneel henessey from the henessey funds and our own brian schactman joining us here at the new york stock exchange. michael, a pretty good day. just heard matt cheslock saying it's kind of a bearish day because the average is masking a lot of stocks that were lower today. >> the rally is getting more narrow and i think we could be due for a pullback. you cannot fight the fed and cannot fight mario draghi. >> you want to ride this as long as it will go. >> yes, we are. please don't mistake that bullishness temporarily for the bears. i feel the american, the japanese and american economy. there is going to be hell to pay and it's going to happen soon. >> you're holding your news and buying. >> neil henessey, can we get back to all-time highs for the dow and the s&p. >> oh, michelle, i think easily. if you look at the dow jones right now, the price-to-sales ratio is 1.28. the most it will go up to is 1.5
so that leaves 17% on the upside or if hundred points. more importantly you look at the s&p 500 companies, they are sitting on 1.5 trillion in cash, 1.5 trillion -- >> hold on. you think 2,300 points in the dow? what are you talking about? >> very much so. >> i mean. you're talking about the high in 2007, michelle, was when the price-to-sales ratio of the dow jones was at 1.8. we're 40% away from that number, but, i mean, the companies are in great shape. there's so much cash sitting on the sidelines, and at some point in time the investors are going to get out of fix the income and move over towards equity. >> can i ask you a question and i'm very much concerned about this. what happens when the bond bubble bursts and those investors flee bonds and go into the stock market for a very long period of time, say about three, six months, get 200, 300-basis point move in bonds. what does that do to the housing market and the economy? what does it do to debt service
payments? we're so addicted to artificially produced low interest rates we cannot have them rise, ever? >> neil? >> i don't think you'll see them rise simply in the short term not only because of what bernanke says. if you look at the banks, they are not going to put out a lone that immediately they will lose money on so, i mean, rates are going to stay stable. if they go up a little bit, that won't hurt corporate profits or anything. if you look at what companies are doing, what are they doing with their cash, not good for unemployment numbers, but it's very, very good for the stock market. they are initiating dividends, raising dividends. stock buybacks, internal infrastructure, making acquisitions, all good for the stock market. >> okay. brian schactman, google is having its best day in 15 months after last night's earnings, and now they are hoping, i guess, apple is hoping it can have the same kind of impact in a few minutes here. >> also, ibm in many ways, when you talk about the dow, the
five-year highs, the story of the day. added 66 points to the dow jones industrial average, and you look at the up-and-down volume, down volume is slightly outpacing up volume. not trying to put a downer, but you have sort of this apathetic market. we talk about all these less. people look at the 2% on the ten-year note. looking at 14,000 on the dow and 1,500 in the s&p and those will be maybe, if they are psychological or not, will be tipping points where people make decisions on whether to put more money to work or take some profits because some people are scratching their head as they just watch it go up and up and un. >> neil henessey is talking about maybe 15,000 on the dow here. >> don't you see a correction? it's not going to go straight up. >> not necessarily it's not going to go straight up but look at the dow jones. the yield on the dow jones today is 2.5%, bill, and if you compare that to a ten-year treasury at 168 or a 30-year treasury at 2.8%, what would you rather have, and at some point
in time when rates go up, people get their quarterly statement and they see that their equity is gone down and oh, my god, where am i going to put my money? >> this is true for a long time. there are so many stocks that actually yield more than the corporate debt of the same company. >> right. >> exactly. >> and yet people choose the corporate debt instead, why? >> this is indicative of the most overpriced, overowned and oversupplied market of mankind. >> you're talking about bonds. >> not just u.s. debt. let me give you an example of why i'm so concerned. look at shirakawa over in japan. the japanese ten-year bond is yielding 0.75%, only because they have deflation in 10 of the last 15 years. what happens when abe and shirakawa are successful in engendering inflation of 2% plus, as if they could nail it at 2%. what happens when bernanke is successful at engendering 2% plus inflation? >> michael, would i just say -- >> what happens to stocks? you guys, can you not fly blind
here and ignore the fact that we're sitting on this bond bubble and when it bursts it's not going to be clean. >> let him answer. >> in all fairness we have a year to wait for japan and already heard from the fed we need jobs. >> how do you know you have a year, because that's -- >> that's what they have said. >> do you think he'll get ahead of that? >> to all the points where the money is going, talking about the incremental growth to the upside and retail investor, we still have volumes. still talk to the traders, yeah, going up. there's been no velocity in terms of the buying even though we've gone up, so michael, you might be right, but we've had some transparency when this stuff will happen, so the smart money has an indication -- >> the old saying is the market can stay irrational for a lot longer than you can stay solvent. been at cnbc for more than a decade. >> look great, by the way. >> very charming of you to say. more than a decade people have come on consistently whatever you do, don't buy the long end
of the treasury curve. i mean, who would want 6%, who would want 5%, who would want 4%, who would want 3% or 2%? >> and the saum thing you probably heard. >> have to interrupt you. >> did they come out. >> netflix. >> waiting for netflix and look at that. oh, my. a 21% gain on the stock as the numbers are being released. they were looking for a loss of 13 cents from netflix. >> and instead we have a loss -- so exactly on the nose, a loss of 13 cents versus estimates for a loss -- >> no, we got a profit. profit of 13 cents versus an expected loss. >> i had so many people in my ear. go ahead on the revenues coming in at 945 million versus estimates of only 934 million, so the number coming in better than expected as well. of course, also looking for subscribers, the cost of content of acquisition, et cetera, but once again, coming in with a profit of 13 cents versus
expectations for a loss of 13 cents, wow, julia. >> reporter: yes, it's a big surprise. wall street was looking for that 13-cent loss and instead got a 13-cent gain. digging into the numbers here, the company added 2.05 million net subscriptions for streaming so they ended the quarter with 27.15 million u.s. streaming subscribers which is on the high end of expectations and international streaming was significantly higher than expected. they ended with 6.12 million international streaming subscribers. another thing that helped netflix this corner was they seem to be losing domestic dvd subscribers, slower than expected so they ended the quarter were 8.22 million domestic dd subscribers and wall street was expecting that number to be lower, expecting that to be just 8 million so people are continuing to pay for that dvd service. a very positive story for netflix, revenue and earnings coming in significantly better than expected and speaks to the
fact that they are committed to spend more on content and does seem to be paying off, at least in this quarter, so we'll continue to dig through here, but they are holding on to those dvd subscribers in a way no one expected. michelle? >> that's important because every single one of them adds another 9.99 per month. let's get more from porter gibbs. what do you think. >> not surprising. i did predict the 13-cent profit and reed hastings has delivered. he is driving netflix right now as well as anybody who could manage a very, very difficult business and he withstood carl icahn's attack, carl icahn's doubled his money in less than four month, and the stock is continuing to go. he's added the disney content deal which doesn't kick in until 2016 but is validation of the
netflix concept, and he's clearly the market leader, and as julia pointed out, netflix is really going wild overseas. they are the market leader in the uk and they are doing exceptionally well in the rest of europe. >> none of this has been lost on the market. i mean, this stock has been very, very strong, not just today, not just this moment as a result of these numbers. i'm wondering if you'd still buy it at these levels here. >> well, the likelihood of a continued rise despite all of the good things that reed hastings is doing is probably being driven by a short squeeze because as of the end of last year over a quarter of the outstanding shares were short and those short sellers are really now caught in a real bind, and i expect the some will continue to go up as they bail out. >> short the stock looking at this. >> does feel like it right now. >> does feel it like right.
>> thanks for joining us. >> it's a pleasure. >> up 21%. 24% now in the after hours after reporting a profit when a loss was expected. big numbers there. don't miss julia's interview with reed hastings. look forward to that very much. jpmorgan jamie dimon apologizing to shareholders for the $6 billion london whale trading loss, but he's also saying life goes on, and, of course, it's easier to say that when you still have record profits despite that big trading loss. >> coming up next, don't miss maria's exclusive interview with jpmorgan ceo jamie dimon. >> apple's crucial earnings release. can you not afford to miss that. we've got the instant analysis that you'll see right here coming up. with fidelity's new options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator...
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welcome back. netflix hit it out of park with its earnings report. julia boorstin has more. the stock is skyrocketing >> reporter: outlook for the first quarter is very upbeat. wall street expects a loss in terms of eps and expects the addition of subscribers to be in the 1 million range but what netflix is saying here they
expect net income to be flat quarter over quarter which means eps of 13 cents per share and also saying that they expect to have roughly the same additions as they saw in the first quarter last year. that looks like the additions of 1.7 million more net subscribers so that's a great number for netflix. outlook is positive. back over to you. >> thank you, julia. our maria bartiromo is at the world economic forum in davos, switzerland with one of the true giants of our banking industry who just happened to have his pay cut recently. maria? >> thanks so much, bill. here with jpmorgan ceo jamie dimon. thanks for being here. >> pleasure to be here. >> news last week that you took a pay cut as a result of the london whale trading loss. would you say now that this issue is officially behind you, or are there still ramifications
to the london whale deal? >> first of all, i didn't take it, i was given one. the board had a decision to make. we did have a record year and the bad. we had one terrible mistake in the year, so, look, we've fixed the problem from a financial risk for the most part. we've disclosed both the economy report and a completely independent board report with independent outside board advisers. the regulators will have their review toss do so more ongoing things from that. we cleaned up cio and changed procedures to make sure we manage the company properly going forward. >> what kind of changes might we expect going forward. in terms of changing the bank, restructuring how the governance is done. >> look, i'm very proud of jpmorgan. you know, last year i think 1.8 trillion of capital or credit for consumers or businesses. we had a problem, you know, we've fully acknowledged that we've undressed ourselves in the public and the rest of the bank is pretty well controlled and pretty well managed. the same bank that went through
'07 and '08 and '09 and 2010 and 011 and for the most part did fine. whenever a company makes a mistake, you should analyze it and be better for you and make sure you apply best practices across the country. there are a couple of things we learned applying across the company. >> what kind of safeguards can you share with us that you are applying? >> look, everything we do risky, a gap in our fortress wall, and then the one -- the one that's going to go across all companies, we use models extensively, just make sure they are always used properly for the right way. we should get model obsessed. start to run your business on models, you'll get in trouble, too. >> pretty extraordinary that even with the trading loss you actually came out as the most profitable bank. you know, blockbuster fourth quarter. take us behind the quarter. what drove the results? >> remember, the results aren't anything you did in that quarter. we've been building systems, hiring bankers and opening
branches. you know, we added small business bankers in california and florida. added corp race rat bankers overseas and opened in sri lanka this week and added more banking powers in nigeria. those things have been going on in technology for five or six years. that's what drives t.some of our businesses are ups and downs so we're affected by the environment, but for the most part that's what drives it, doing more business with customers all the time, you know in, a way that's good for customers. >> let me ask you about the u.s. we saw the mortgage original nations were up huge for you in the quarter of the you've been talking a lot in the last couple of years now about housing really showing some true improvements and having bottomed. >> right. >> where are we in that? what are we expecting in the number couple of years in terms of houseing? >> housing has totally bottomed and getting better? you saw today homes for sales have come so far down that they are in short supply in certain markets. cheaper to buy than to rent. price is low and mortgage rates are like 3.5%, and it's not
going to be an absence of a strong economy. i really think at this point the economy will drive housing. still have two tight mortgage markets because of appraisaappr litigation and stuff and the cfpb came out with good roles. five years as the crisis. still don't know what the skin in the rules are. all the mortgage rules. when they are in place i think it will be easy to get a mortgage. still harder to get one than it should be. >> what about the federal reserve and the c-car coming out? what can shareholders expect? >> i'll repeat what i said. when we started the dividend a couple years ago, they said expect constant increases so you can assume that we think that way, and we can't tell you the best stock buyback. always going to be less than it was last time. this year our goal -- >> because the stock has moved up in. >> it's not just that. we're going to meet our 9.5 mark
this year. we'll meet the liquidity requirements, whatever they are this year. whatever they are we'll meet them this year. we're not going to be in this 2019 type thing. >> already feeling confident in terms of capital and liquidity? >> we'll do whatever it takes to do it. >> in terms of the federal reserve and the low interest rate environment, how do you offset this difficulty in terms of making money in such a low rate environment? >> one of the funny things here i keep on hearing that the banks have benefitted from a low rate environment, subsidized because of the low rate environment. you're right, it hurts us more than helps us. we've told the world is squeezes our net income by 500 million a year. there will be a reverse side to that. rates will go up one day and we'll get that back, so we're investing in the business as if it were a normal environment. we know right now our margins are lower. if you're running a pizza shot and the cost of mozzarella was higher you wouldn't stop selling pizzas because your mar jibs are lower. we try to think it through.
>> in the last couple of decades your industry has been facing a whole wave of positives. deregulation, globalization. haven't things changed going forward? you're facing much higher regulation, a lot of economies look inward. it seems like a structural change has -- >> a lot of those, quote positives, didn't be positive. a lot of companies went bankrupt, some didn't survive. a lot more regulation, that's life. always been regulated. i fight for good regulation, not just more or less, and it will change. some business models, i think different cops have different approaches. cost of credit will go up a little bi. not saying it's a catastrophe. things change and people adjust to a new environment and when all is said and done the system will be stronger. that was the point of all of it. >> does the system get more stronger after more attacks? here we are looking at, you know, an environment where the population, the populace is still attacking the banks even the president's inauguration speech the other night, it just felt like it's going to be a
continued pressure on the financial services industry. >> when you say the populace, you are the populace and you're driving it. people can't help themselves. >> we like to believe we're reflecting what people are talking about. >> that's not logic or intelligence or getting smarter. that is just joining the mob, okay? we need to fix our problems, collaboration, brains, that's what's going to get us there. my job -- look, i don't particularly like banks being attacked all the time. my job is to serve my clients including 30 million american customers, 30,000 middle market companies and 10,000 institutions around the world and 20,000 investors and 5 million retail investors, and we want to do a great job for them. that's my job. i will die doing that job, and, you know, if the press is terrible, then you'll just have to deal with it >> you think the press is terrible? >> if it is, you have to deal with it. >> what about president obama? >> my attitude about the president, we need more facts and analysis and clan rage. we don't need scapegoating and
fingerpointing. >> will you get it? >> i think people get exhausted eventually of scapegoating and fingerpointing. not helping our economy grow. want jobs, fix the problems. good policy will help create jobs. >> what policies will create jobs? that's what we're all trying to figure out. how do you create jobs? >> i think i've been fairly consistent that if we had done the grand bargain, doesn't have to be exactly the one that anyone wants, that showed that americans can make decisions, that set a more effective tax system, that reduced taxes going forward, we could have a booming environment. now, i may be wrong. that's my own personal belief. if we have a grand bargain, america would take off. it's important for america to get strong because the rest of the world needs us, to you know, because europe still has its issues and it will for a couple of years, so i think it's important that america kind of take the lead here, and i'm hoping our congress and our president that's what they do, and if they don't, jpmorgan will deal with it. it's not personal. it's about i want jobs. >> are you expecting a fight around the debt ceiling? do you think we'll have a
disruption around this inability to compromise? >> i know nothing more than you other than what i read in the paper today and it seems like they are already starting to. could mice by pushing it out and asking for a budget which i think all seems rational and compromise by the way so i applaud them. >> what does your gut tell you about all the money moving into stocks recently? had a fantastic early 2013. do you think this is sustainable? >> the economy grows it's sustainable, and i still think you can buy american companies at pretty good prices. these are some of the world class companies, you know, not just american companies, european and japanese and chinese companies, but you are still buying at fairly good prices and the alternatives aren't that good, yeah, i'm comfortable owning stocks right now. >> are you saying that kind of comfort on the part of investors, the private bank, wealth management? what are you seeing in terms of the sentiment? >> i think, yes, but not -- it's not -- you and i have seen real bull markets, not like the gung-ho, a lot of suspicion and caution, et cetera, which is not
a bad thing, by the way. >> jamie, good to have you. >> jamie dimon joining us. bill, back to you. >> bundled up, the heavy coat, the scarf, gloves on and he's dressed like i am right now. >> that old foreigner song "hot blooded." >> always the coolest guy in the room. >> yes. >> apple's moment of truth there. the world's most valuable company posts quarterly earnings minutes from now. >> we'll bring you the numbers live and break them down with our team of apple shareholders. (announcer) scottrade knows our clients trade
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(announcer) scottrade. voted "best investment services company." okay. they don't get any bigger than this. apple earnings will be out in just moments from now so stand by for that. looking for a profit of $13.47. >> and revenue of 454.73 billion. jon fortt is watching those numbers when they come in. gene monies ter is bullish on the some and james ramos and dan morgan of synovus trust which owns shares of the company. james, let me start with you. not just the revenue that we care about, sales of iphones, ipads, ipad minis. what revenue are you watchinging for in. >> iphone, 50 million is the bogey. sets the tone for the march quarter. the bogey for the march quarter is 41 billion and revenue.
that's where the buy side is at. >> you want to see iphone sales. 50 million phones sold? >> 50 million. if it starts with a 4, that's a problem. better than a 5, that's good. >> okay. james, you've been our resident skeptic on apple lately. what are your expectations here? >> you know, i think gene is right. that has to be the bellwether as far as the iphone, but i think we need to take a look at i ipad as well and how many of those ipad minis did they actually push out during the fourth quarter? >> why are you focused on that one when it seems like the iphone is the one with the higher profit margins. >> y can talk about profit margin all you want. we've entered an era where any device will enter other devices. the next accessory. look at the next accessory. that device is hooking into vehicles and things like that as a platform for entertainment. >> got it. >> moments away from that number. dan morgan. what are your expectations?
>> also focusing on gross margins. we know gross margins have been falling considerably. estimate 37%. up 47% last quarter so obviously if we can see a big change in what the expectations are in terms of mar egyptian, that can really boost the stock on top of what we talked about before in terms of the iphone sales north of i've got 48 million but 0 million would be great. >> the stock is incredibly volatile in the after hours even before we have numbers. moving in and out of positive territory before we even get anything. >> i've got a number so we're still waiting on that one. >> what about the margins, gene munster? >> well, probably going to be better than what they guided to. the bogey is somewhere between 38% and 39 it is for gross margins. that's the key, and as far as the guidance, the guidance is likely 38. typically got a little bit below so got to be better than what they said but they can guide conservative. been guiding conservatives the last three quarters. extremely conservative so that's
why the setup is good. >> didn't we all come to the solution with the launch of the ipad mini we'd have to face -- >> i got a number. >> here we are, guys. expecting 1347. i heard a whisper of 1368. hang on, robert, hang on, robert, and i get 1381. that's the number right there. have them give me the revenue again. >> okay. so they were expecting revenue of 54.93. they got 54.51. gene munster, they beat on the bottom line but not on the top line. i know we're waiting for the breakdown. >> i think the iphone number needs to start with a 5 and my guess is it starts with a 4, 54 billion. >> 47.8 million iphones. >> 47.8. jon fort, give us that number again. >> it's 47.8 million iphones on
ipads. we've got 22.9 million ipads, and 4.1 million macs which is under what a number of people were expecting. they were at 5.2 million a year ago, so the mac number is lower. we do know that that imac took a while to become available within the quarter so there might be some supply constraint issues there. i'll be looking down into guidance. >> the stock is getting hit, john. you should say, down about 20 bucks, lower by 3%, approaching a drop of 4%. >> gene munster, 47.8 million iphones. >> it needed to start with a 5 to have the stock to be up. i'm interested for john to come out with what the guidance is. you know, the nuance is a disappointment. >> go ahead, john. >> they are guiding to revenue between 41 and 42 billion so that's a $42 million mid-point gross margin between 37.5 and
38.5%. op-x, 3.8 and 3.9 billion. other income, 350 million and a tax rate of 26%. >> okay. gene in. >> it's actually kivon -- the numbers are disappointing on the iphone, slightly disappointing, but if you step back the expectations were for 41 billion in the mid-point of the revenue guide and did 42 so that was better. essentially this is what people had really expected absent the small disappointment on the iphone number, but it seems pretty -- actually pretty uneventful. it's directionally more negative than what we expected. >> you got 22.9 million ipads. what did you think? >> i think that's actually a really good number. it's better than what i expected. but the thing that catches me, apple may be worse than what we expected because they just eked out the number.
>> even though the eps beat was really, really big. >> dan, how do you feel about watching the stock that you own a lot of down another 23 bucks and below 500 bucks? >> i mean, it's frustrating. this number, obviously, hoping for a blowout number after those verizon iphone numbers came in in terms of the new subscribers, but a little bit concerned about that gross margin guidance, too, going into the next quarter, so obviously want to get a little deeper into the numbers before i make a judgment call, but as your other guests were saying, look looiks like kind of in line and not the big blowout number. >> nothing you've heard so far tells you that you want to lighten up or sell into this weakness because there's something fundamentally changed or that tells you that you're going to buy on this big pullback we've seen over the last few months? >> i think we need to give apple a chance. new opportunities coming down the road in china. a lot of things that are still on the plate for them, so i think it's still short sighted to say, hey, let's get rid of the stock at this point. in terms of buying new shares
for clients who, you know, fix their risk profile, definitely a stock to add to. have to bear in mind, michelle, apple is such a large-cap stock and health it for such a long time, been on the buy list, that it already makes up a large percentage a lot of time of client equity holding. >> do you mind telling us what your cost basis is? >> well, it's different for every client, but you have to bear in mind it's upon on the list, our buy list since like 2004. >> wow. >> so it's made a tremendous run since that time. >> you've done okay. >> can't really double up at 450, 500. we're in a big position. >> gene munster, do you like apple here? >> we do, and one other thing about apple. just take a little bit out of my tech focus. look at the top 30 10 billion, apple cheap stock. super focused on the product.
minute to minute. big picture is there. cheap relative to its growth and new products are coming. i know that this is an uneventful quarter they just printed but the reality is we'll be talking about cheaper phones, new phones, apple television and people will get psyched up about the stock in the near term based on that, the next quarter or two. >> hey, guys. >> a couple things i'd like to point out. one, looks like apple's cash is up to 137 million which is always nice to note. the earnings per share technically at 13.81 are down from a year ago, and you've also got to take into account that this quarter is a week shorter than a year ago so that is an important thing to factor in. also on this gross margin, apple had guided to 36%. they come in at 38.6%. it's important to compare this with two years ago because apple's costs are always a lot higher when they launch a brand new design of iphone.
they did that with the iphone four two years ago and margins had some impact then. though the timing was a little bit different, so the gross margins are actually similar to what they were two years ago given that they launched an iphone 5 and a number of other new products. >> got to take a quick break. everybody come back. don't go anywhere. check your blackberry or iphone or whatever you've got there. >> hold thought. >> do a little research, and we'll come back and get more thoughts from our panel here. the stock down 5.4% in the after hours after apple reports earnings. more on that coming up. >> yeah. the shoe was dropped. what do you do with apple shares now that the first quarter results have been revealed? someone here is shorting that stock. he's going to join the conversation on the other side of the break. can't afford to miss it, and then later. >> the fact is we had four dead americans. >> i understand. >> was it because of a protest or goes out for a walk one night who decided they would go kill some americans? what difference at this point does it make?
>> secretary of state hillary clinton going toe to toe with the senate foreign relations panel on the benghazi, libya attack. her fiery testimony has been creating a big buzz in cyber space today. we'll have the blow by blow still to come. [ male announcer ] here's a word that could give you peace of mind. unbiased.
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all right. let's review. here's where we stand. apple down 1.3% in the after hours session after reporting earnings that beat on the bottom line. came in with 13.81. the expectation was 13.47. revenue, a little light, but everybody has been looking very closely at those numbers for iphone sales which came in at 47.8 million units. ipad sales 22.9 million unit in the quarter, and -- and mac sales were 4.1 million lower than last year, but number that got our attention. >> $137 billion in cash. >> you couldn't spend that kind of money. >> moly holy smokes. >> let's get reaction. jon fortt and also joining us now james ramelli who may initiate a short position on
apple in the next few days. i was under the impression you already had. are you a little late. would you do it now? >> no, i still think that the pressure and momentum is to the down side. you know, two-thirds of the time, the day after earnings, a israel will close lower than it opens if it gaps lower, i still think that there is a way to get it in short here. since that 705 top, seen sellers come in on any rally. going to gap lower. the options market was implying a move to the downside about $36 by friday expiration so that's lower. could see another $14 from the down side into friday. >> what you're looking at is the bets being placed in the options market right now, and they seem to be suggesting come friday when we get an expiration that this stock will be appreciably lower from here. that's why you're thinking about putting a shot on right now, yes? >> yes, correct. >> okay. so this is a short-term trade, but this stock has already gone from 700 something down to 500 and something. do you think the trend is going
to go lower from here? >> absolutely. you know, since that blowoff top at 705 seen sellers come in on every rally that the seller has found. since the beginning of the year, broader markets have touched new multi-year highs on a daily basis and apple massively underperforming and still have downside here. the pressure is to the down side. >> what do you think about that? >> gene's the bull in the group. >> right. >> look at last year. the stock really moved, not on the numbers, moved throughout the year based on anticipation of products. not an evaluation question. certain amount of cash. i think everybody would agree with that. for the stock to work it needs a catalyst, and to say that there's not going to be a catalyst, apple is not going to innovate so the investors will come back to the store when that happens, probably the next three to six months. >> dan, are you hoping that he's right? i assume you are? >> kind of going back to what jean was saying a catalyst, heard a lot of talk about china
and what's going on over there with sam sung and lower-priced phones that come out. obviously that's a margin issue. could be a huge opportunity for apple going forward. that could be a story breaking in terms of china wireless which is the number one, you know, wireless player over there. don't even sell iphones so if they can cut a deal there and come out with a phone and got another leg on top of iphone 5 so there's so many things coming down the road i think. >> for you it's been a lack of innovation as you see it in this company. you feel they are falling behind. now we're hearing there's going to be an iphone 5s coming out early summer around june. they are still bringing new product out here. >> yeah. it's a hand set. we're talking about m to m or machine to machine communication and the internet of everything. other devices that are connected, not just hand sets. only 7 billion people in the world. there's trillions of things out
there that can be connected. apple can spend that 137 billion and dominate but they are not. they are not innovating, stuck on a hand set and -- and quite frankly they need to move outside that. >> james, for so long what apple did is what the markets did. today we saw the markets rise a lot because of google and a lot of positive feelings about google. should we expect the overall market to be weak? >> james ramelli, what do you think, can this pressure the entire market tomorrow? >> you know, i don't think so. i think the pressure in the broader market is to the upside. you know, we've seen the market touch new multi-year highs intraday and apple has been weak through that entire period. points made on innovation. i couldn't agree more. new products apple has been coming out with. not enough innovation. it won't be enough to help them grow and get back to get up to the $700 level in the stock price.
talk about the deal with china wireless. not enough people in china to get the 4g. >> got it. >> jon fortt? >> a couple of things to point out. one, there were about 1 million plus units short of expectations on mac. had they made that number, and that could have had to do with supply constraints as i mentioned earlier with the imac on macbook pros, both the revenue and eps would have looked quite different. we were training ourselves to look at iphone and ipad, but that mac number ends up being in this case. interested in hearing why that was light. also i'm seaing that apple is saying that the iphone more than doubled its units in china year over year. that, too, is important, so just putting that out there. >> tim cook has said that's their most important market right now. that being china. gentlemen, appreciate your time and your thoughts on this. we'll let you get to the conference call. thank you all for joining us today. >> thank you. >> see you later.
>> stock off nearly 5%. >> meantime, secretary of state hillary clinton getting fired up as she testifies before a senate panel on the attack in benghazi, libya. >> what difference at this point does it make? it is our job to figure out what happened and do everything we can. >> we'll have the blow by blow exchange that's creating a big stir on the internet coming up. stay tuned.
clinton going toe to toe with senator ron johnson at a senate foreign relations hearing committee meeting. clinton testifying about the benghazi, libya attack in september. >> we have no doubt they were terrorists. they were militants. they attacked us. they killed on and why they were doing what they were doing -- >> no, no -- >> still -- >> again, we were misled there have been supposedly protest and something sprang out of that, an assault sprang out of that and that was easily ascertained that was not the fact and the american people could have known that within days and they didn't know that. >> with all due respect, the fact is, we had four dead americans. was it because of a protest or was it because of guys out for a we can one night and decided they would kill some americans? what difference at this point does it make? it is our job to figure out what happened and do everything we can to prevent it from ever happening again, senator. >> she clearly met with skeptics on the hill today. she he did. another flood of earnings hits wall street first thing tomorrow morning. >> our panel of market pros sets
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with 30 seconds on the clock, our next guest will tell you what could move the market tomorrow. >> john hummel of ais group and dane leon of mcquartery group. stacy, 30 seconds on the clock. what do you expect tomorrow? >> great things. obviously everybody is focused on apple and netflix, but other things to look at as well. the initial jobless claims numbers, we think need to be strong in order for the market to sustain long-term sustainability. also signer semiconductor. we think we'll get an indication the semi conductor cycle has bottomed and that will be positive for technology overall. we also have ao smith reporting tomorrow. we think they need to be incredibly confident with the overall recovery in the real estate market in order for people to want to stay along that trade. >> wow, really squeezing a lot in 30 seconds. john, break it down. what are you looking for? 30 seconds. >> we're going to be focused on the uspmi manufacturing index and the kansas city fed index,
both of which we expect will show slow u.s. growth and continue to support aggressive fed policy. offsetting that, we think that chinese manufacturing tomorrow will show a further acceleration and the combination of those factors are likely to support higher commodity and precious metals prices that we're involved in. >> all right. very good. everybody is getting a lot of stuff in today. dain, high bar has been set. 30 seconds. go. >> thank you for having me. we think continued improvement in the labor market will be critical to sustaining the current rally in the capital goods industry. so tomorrow morning we'll be focused on the initial jobless claims reports, as several reports recently have hit four-year lows, helping it boost market confidence that we could see employment recovery materialize in the u.s. market over the course of 2013. within the capital goods group, we'll be focused on stanley, black & decker, although sw management may guide for industrial growth in 2013.
we will be looking for commentary that could suggest u.s. and european markets are set to improve. >> we gave them stacy's five seconds. >> thank you all. good stuff. be a busy day tomorrow. that's for sure. thank you for joining us. don't forget, join us tomorrow on "closing bell," maria on assignment at the world economic forum in dabo switzerland. here's what she has in the pipeline. >> coming up tomorrow on "closing bell", i'll be sitting down with billionaire investor george soros. we'll talk about the economy in europe, the u.s., as well as vesting today. also his take on japan and the japanese yen tomorrow on "the closing bell." >> and setting the tone for thursday morning trade, what else? bill? >> apple and netflix shares, michelle, moving in the after hours session on the heels of their quarterly results. we will recap the day's action still ahead. >> i just read the teleprompter. . >> i know. ant. with scottrade's online banking,
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